BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de Le�n, Chair


          SB 1322 (Hernandez) - California Health Care Quality Improvement  
          and Cost Containment Commission.
          
          Amended: April 1, 2014          Policy Vote: Health 7-0
          Urgency: No                     Mandate: No
          Hearing Date: May 5, 2014       Consultant: Brendan McCarthy
          
          This bill meets the criteria for referral to the Suspense File.
          
          
          Bill Summary: SB 1322 would create an appointed commission to  
          research and report on strategies to improve health care quality  
          and contain costs.

          Fiscal Impact: 
              One-time costs of at least $500,000 for staff to support  
              the commission, research healthcare cost and quality issues,  
              and develop recommendations and reports (private funds or  
              federal funds). Given the complexity of health care  
              financing and the very significant financial interests in  
              any change to health care financing, there is likely to be  
              significant interest by stakeholders in the recommendations  
              of the commission. It is likely that significant staff  
              support will be necessary to accommodate interest by  
              stakeholders and to provide information on this issue to  
              commission members.

          Background: Under current law, the state provides support for  
          health care coverage through a variety of programs. The state is  
          a significant purchaser of health care services for its  
          employees and their dependents through the CalPERS system. The  
          state operates the Medi-Cal program, which provides health care  
          coverage for low income and disabled people. The state also  
          operates Covered California, which facilitates federal subsidies  
          for health care coverage for certain low income people.

          Health care costs account for over 17 percent of United States  
          gross domestic product and growth in health care costs have  
          significantly outpaced general inflation levels over the last  
          several decades.

          Proposed Law: SB 1322 would create an appointed commission to  








          SB 1322 (Hernandez)
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          research and report on strategies to improve health care quality  
          and contain costs.

          Specific provisions of the bill would:
              Establish the membership of the Commission, with Governor's  
              appointees and appointees by the Senate and Assembly;
              Require the Commission to report within six months of  
              convening with recommendation  for strategies to improve  
              health care quality and control costs;
              Require that the bill only be implemented once sufficient  
              private or federal funds have been received and appropriated  
              to support the Commission.

          Related Legislation: 
              AB 2967 (Lieber, 2008) would have established a committee  
              to develop a plan for health care cost and quality  
              transparency. That bill died on the Senate Floor.
              AB 1528 (Cohn, 2003) contained provisions substantially  
              similar to this bill. That bill was chaptered, but later  
              repealed by a voter referendum that repealed SB 2 (Burton,  
              2003, a health care coverage measure).